Today, Bernstein analyst Carlos Kirjner has a report on how much
Google paid for Fiber installation in Kansas City, and how much
it might cost in Austin.

He estimates Google's total cash investment in Kansas City will
be $94 million in 2013. For a company that generates over $4
billion cash every three months, it's not a lot of money.

To build out the network in Austin, the cost per household will
be similar to Kansas City, says Kirjner.

We'll use Kirjner's tables to break down where the money goes,
what customers get, and then at the end, his thoughts on why it
makes sense for Google.

The total cost to pass Fiber is $84 million.

Screenshot, Bernstein

The cost to acquire and connect a customer only using broadband
isn't cheap.Screenshot, Bernstein

The cost to acquire and connect a customer with TV and broadband
is even more expensive.

Screenshot, Bernstein

The overall estimated cost for this year isn't all that high,
though:

Screenshot, Bernstein

If you're a Google Fiber customer, here's what you can buy. It's
a pretty great deal.

Screenshot, Bernstein

And here's what that translates to for Google:

Screenshot, Bernstein

And for someone with TV and internet:

Screenshot, Bernstein

If you're still with us, great. You might be wondering why Google
is doing this.

There are a number of reasons. First, it can be a real business.
Google can price this to make money in the long run, or at least
break even if it chooses the right markets to attack.

Second, Google wants to prove that fast Internet is feasible at
an affordable price, hopefully scaring the big cable companies
into offering the same. The faster your Internet, the more you
use it, and the more you use the Internet, the more you use
Google.

Third, for pocket change, Google has a sort of experimental lab
with which to play around. It can test new ad formats, learn
about consumer behavior, and see what people watch on TV.